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To make ends meet, black-market
capitalism flourishes in Cuba
Communist leaders find
few solutions in tackling systemic economic
problems
By Gary Marx, tribune foreign
correspondent. Published January 19, 2007
in The Chicago Tribune.
HAVANA -- The 41-year-old Havana resident
earns the equivalent of $14 a month managing
a state-run food store. His living expenses
run about $60 a month.
How does he make up the difference?
"I sell stolen food on the black market,"
said the man, who asked not to be identified
out of fear of government reprisal. "All
the store managers I know do the same thing."
With state salaries averaging about $15
a month and the cost of everything from
a pair of jeans ($25) to a beer ($1) out
of reach, many Cubans resort to cheating
government enterprises and other illegal
activities to make ends meet, even though
the government provides many subsidized
services.
Known here as working por la izquierda,
or literally "for the left," the
corruption ranges from a butcher who doubles
his $8 monthly salary by skimming pork,
chicken and other meat from government supplies
to a state vehicle inspector who refuses
to approve a car in tip-top shape without
a $12 bribe.
In a country plagued by shortages, black
marketeers hawk air conditioners, computers,
DVD players, lobster tails, dog food, light
bulbs, smoked salmon, satellite dishes,
toilet seat covers, chain-link fencing,
cement and countless other items, much of
it stolen from the workplace or government
stockpiles.
Over the years, Cuban leader Fidel Castro
has tried to crack down on such graft, which
he warned was undermining the socialist
system. In 2005, he sent thousands of young
social workers into state-run service stations
to stem the massive theft of gasoline by
employees.
But the campaign has taken on a new urgency
in recent months as Castro remains out of
public view after undergoing major surgery
and his brother and designated successor,
Raul, tries to solidify his control.
Like his brother, Raul Castro has urged
workers to show more discipline and ideological
commitment to combat theft, absenteeism
and shoddy services that plague state enterprises.
He has stepped up enforcement, completing
a series of checkpoints along major highways
to counter the transport and sale of black-market
goods.
'Raul is different from Fidel'
But Raul Castro also appears to recognize
that rampant corruption is caused more by
desperation than avarice in a nation where
state salaries don't cover basic needs,
the transport system is near collapse, housing
stocks are crumbling, and food production
is faltering.
"Raul is different from Fidel,"
said Philip Peters, a Cuba expert at the
Lexington Institute think tank. "The
way Fidel framed the corruption issue, it
was a matter of personal greed. Raul is
discussing it as a more systemic problem."
Peters said the first sign of a new approach
came last October when Juventud Rebelde,
a communist youth daily, published a three-part
series titled "The Big Old Swindle."
The newspaper sent reporters to government
enterprises and described employees cheating
customers in cafeterias, beauty salons,
appliance repair shops and other businesses.
Beer mugs weren't filled to the brim. Sandwiches
were short on meat. A taxi driver and cobbler
overcharged customers.
"Some state services are being used
for personal enrichment by insensitive people
who change the prices and norms of the products,"
the paper said.
The newspaper reported that more than half
the state-run businesses inspected by Havana
authorities in the first eight months of
2006 overcharged or skimped on products.
Juventud Rebelde also found the state could
not provide even the most basic tools for
employees to do their jobs. The shoe repairman
complained he had to purchase glue and thread
out of his own pocket, even though he works
for the government.
"What Raul is exposing in these articles
is that the state enterprises are dysfunctional,"
Peters said. "There is no supply chain.
What these articles are screaming is that
the system doesn't work."
A steely pragmatist who a decade ago championed
limited free-market reforms, Raul Castro
last month ordered officials to conduct
a study of Cuba's economic problems and
recommend solutions.
"In this Revolution we are tired of
excuses," an angry Castro said at the
year-end meeting of the National Assembly.
Analysts say it is unlikely Raul Castro
will adopt Chinese-style reforms.
Tackling the problem
But one prominent Cuban economist said
top officials are considering several measures
to boost productivity and growth, including
decentralizing control over state enterprises
and increasing investment in infrastructure.
A European diplomat in Havana warned that
Raul Castro, who turns 76 in June, must
act quickly to improve living standards
and win public support before he hands over
power to a new generation of leaders.
"Raul needs to solve these issues
before he is out of the leadership, before
he dies," said the diplomat, who asked
not to be named. "The real question
is not what happens after Fidel dies. It's
what happens after Raul."
The Soviet Union's collapse ended billions
of dollars in subsidies and sent Cuba's
economy into a free fall in the early 1990s.
Fidel Castro reacted to the crisis by opening
the country to tourism, legalizing the dollar,
allowing limited private enterprise and
other reforms.
But he reversed course in recent years
as the economy rebounded, thanks to the
high price of nickel, a key Cuban export,
and the support of Venezuela, which provides
an estimated $2 billion a year in discounted
oil, financial credits and other assistance.
Nonetheless, while Cuba's macro-economic
numbers have improved, many Cubans say their
lives remain difficult.
One Havana resident who earns about $11
a month at a state-run facility that prepares
school lunches said he skims rice, beans,
eggs and other food to feed his family and
sell on the black market. He has a wife
and four children.
"They can't call me a thief,"
he said. "This is survival."
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